Global South Dithering Away from BRI
Within ten years of President Xi Jinping’s announcement in Sept 2013 of China’s ambitious plan, the Border Road Initiative, BRI with declared intention to enhance inter regional connectivity and mutually cooperative development globally, more and more countries, who joined the BRI are rethinking their strategy.
Most of the European countries, the United States and India did not join China’s BRI plan. Over the years, criticism of the Border Road Initiative has been mounting across the world, including participating countries alleging lack of transparency, harsh terms of financing and rigid loan repayment conditions.
The U.S. led Quadrilateral Security Dialogue countries are critical of BRI terming it as expansionist move by Beijing. Delays in the completion leading to time and cost overruns and above all, environmental concerns are other prominent issues of discord.
India declined to join the BRI as its flagship multi-mode project the China-Pakistan Economic Corridor, CPEC passes through Gilgit- Baltistan region of Pakistan Occupied Kashmir, POK. The 3,000-kilometer long CPEC will connect Xinjiang province with Gwadar deep seaport in Baluchistan province of Pakistan, giving China access to the Arabian sea.
Nearly 150 countries, including Heads of State and Governments of many countries had attended the first Border Road Forum, BRF meeting held in May 2017 in Beijing and signed up for the BRI. Three summit meetings of the BRF have been held since then.
The initial euphoria to be in the company of China by joining the BRI with more and more countries showing their inclination for it in the first and second BRF meets was missing in the third summit in 2023. More and more countries were skeptical about, what they called, China’s debt trap and occupation of projects like Hambantota port in Sri Lanka, if the country failed to repay loan amount for the BRI project on schedule.
Most of the infrastructure projects identified under the BRI were big ticket ventures involving huge investments. China promised to provide long term soft loans but crafted terms and conditions that suited it. For most of the countries, interest rates on loans granted by China for BRI projects were more than the World Bank or IMF loan grants, causing hardships.
Sri Lanka had to lease out its crucial Hambantota port to China for non-payment of loan taken for it. Laos is facing serious public anger against billions of dollars loan taken from China for infrastructure projects and difficulty in repayment in the face of high inflation. The country is seriously on the brink of an economic crisis with China reluctant to ease loan. repayment terms.
Some African countries like Zambia, Ethiopia and Kenya which had signed huge rail and road connectivity projects under BRI are facing serious problems in debt servicing. Most other countries, like Malaysia, Pakistan, Myanmar, and Nepal are reluctant to go ahead with the projects that they had signed under China’s BRI framework.
Pakistan has down scaled its China-Pakistan Economic Corridor. It has already walked out of the Diamer-Bhasha dam project, which was part of the ambitious CPEC citing stringent monetary conditions imposed by Beijing.
Nepal had initially identified more than 20 connectivity, energy and agriculture projects under BRI, but the list was later pruned to nine. None of these projects could take off till today.
Even the much hyped six-billion-dollar trans-Himalayan multi-mode connectivity project for which a Memorandum of Understanding was signed between Nepal and China in a bid to reduce Nepal’s dependence on India for its third country trade, is on hold. Even preparation of Detailed Project Report is held up over differences on modalities for financing the most hazardous mountainous project.
Italy the only country from among the G-7 industrialized nations which had formally endorsed China’s BRI and joined it in 2019. It too has withdrawn with President Giorgia Meloni declaring that it would bring no significant gains to Italy.
Chinese lending to Africa and Latin America| decreased substantially between 2017 to 2023, according to Boston University’s Global Development Policy Center said, adding that corruption, environmental issues and social irritants have plagued BRI projects in several countries.
There is a growing apprehension that China uses debt to trap countries into providing long-term access to their public assets. China appears to be using investment and trade to create geo-political influence over the recipient country.
Factoring in the flip-side of BRI, and underscoring the importance of technology in development, President Xi has rolled out a proposal for global cooperation in Artificial Intelligence, AI. How much he would succeed in his new endeavor, or whether it would also face hiccups like his BRI, we will know in the days ahead. ###
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